LJN Newsletters

Highlights of the latest insurance cases from around the country.

It is a common enough scenario ' a company purchases a directors and officers liability policy (a 'D&O Policy') ' to protect against any claims that may be brought against its directors and officers. The D&O Policy also may contain what is termed 'entity coverage' meaning that the policy may cover claims made both against the directors and officers, as well as the company itself. While the D&O Policy may be relatively straightforward in providing for the rights and obligations of the respective parties, if the company files for bankruptcy a whole host of issues arise. In this scenario, the laws governing bankruptcy and insurance may collide and, in some instances, are not easily reconcilable.

General liability policies are frequently ' and incorrectly ' described as covering 'bodily injury' and 'property damage.' More accurately, the policies promise to 'pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies.' ISO CG 0001 12 04 (2003) ('CGL'), at 1.

Several recent cases in Ohio, following in the wake of the 2003 California decision in Henkel Corp. v. Hartford Accident & Indemnity Co., 29 Cal. 4th 934 (Feb. 3, 2003), provide new insights into the problems companies with complex corporate histories face when seeking coverage for long tail liabilities.

Many lawyers today seek unconventional career paths. Instead of career ladders that envision uninterrupted, full-time, upward movement toward partnership, lawyers now think in terms of career lattices that include lateral moves, flexible work schedules, and occasional periods away from practice altogether. This highly mobile 'free agent' lawyer population creates a dilemma for law firms. Firms need a stable group of lawyers to serve their clients and become the firm's future partners and leaders. Rather than risk losing lawyers, many firms are trying inventive approaches to create more flexible career paths. Here are five current trends.

Recently, several prominent partners have left their law firms to set up shop with a competing establishment. As was the case in each of these instances, a partner seldom leaves the firm alone — often staff, associates, and even other partners join the new endeavor. May a departing partner solicit others to join him or her without violating fiduciary duty to the original firm? At what point must the departing partner notify the partnership of his or her efforts to recruit firm employees? This article suggests that partners may solicit attorneys and staff of their original partnership without violating their fiduciary duty, as long as the manner of their solicitation conforms to their fiduciary duty.

Everyone knows that a manager who expresses discriminatory views and then fires or disciplines an employee belonging to the disfavored group may create a claim against the employer. But what happens when an unbiased manager relies on the recommendation of another supervisor who, unbeknownst to the decision maker, is a raging bigot?

Times have certainly changed. The U.S. Department of the Treasury ('Treasury') issued two sets of regulations in early April that impact employee benefits. The first set was final regulations addressing the benefit and contribution limits for qualified pension plans under Internal Revenue Code ('Code') §415. The second set, issued a week later, was final regulations governing nonqualified deferred compensation under Code §409A.